Newmark Confirms Three New Listings - Could Eclipse $115M

CONCORD—Newmark’s Capital Markets group delivered as expected at this past week’s Top of the Market program, the team’s 17th annual assessment of New England’s commercial real estate sales sector, as the packed audience at Boston’s Intercontinental Hotel was apprised of new exclusive listings amounting to over $1 billion in anticipated value being handled by the contingent. A Real Reporter article in advance of Tuesday’s event relayed one property in the diverse lineup, the supremely located 70 Federal St. that sits at the corner of Franklin Street across from the verdant Norman B. Leventhal park, an office-retail mixture held by the same family since its completion in 1968.

That seven-story, 64,000-sf building is expected to yield upwards of $550 per sf by industry estimates. But as Newmark Executive Managing Director Matthew E. Pullen conveys to therealreporter.com, the roster hardly ends there, with “all the food groups” included in that $1 billion assemblage and Pullen confirming that pipeline includes Normandy’s thriving 300 Baker Ave. office building in Concord, the mixed-use 313 Washington St. in the heart of Newton Corner and a 390,000-sf package of high-bay industrial properties owned by Colony Realty Partners that some predict will trade in the mid-$30 million range. Collectively, with 300 Baker Ave. anticipated to price in the high-$60 million sphere and 313 Washington St. around $14 million, those three assets alone could bring between $115 million and $120 million gauging market watchers spoken to who offered impressive attributes for each separate assignment.

The headliner would be 300 Baker Ave., a 413,000-sf building that Normandy acquired for $65.0 million in Dec. 2006. The New Jersey based developer has already cashed out on a 49,250-sf medical office building it constructed on the site leased out to Harvard Vanguard Associates and harvested for $24.3 million in July 2013, a deal negotiated by the same Capital Markets team that along with Pullen is led by Newmark US Head of Capital Markets Robert E. Griffin Jr. and Vice-Chairman Edward C. Maher Jr. They are joined on the Baker Avenue listing by Director James M. Tribble and Associate Director Samantha Hallowell.

Rare for a leafy suburb such as Concord, 300 Baker Ave. can claim transit-oriented status from being within “easy walking distance” of the West Concord train station connecting to Boston plus having immediate vehicular access to Route 2A, Newmark notes while also promoting the 90 percent occupancy rate by a baker’s dozen of tenants whose average weighted lease term remaining tops eight years. Marketing materials obtained by Real Reporter further detail a $23.9 million infusion of capital by the current stewards, funds which overhauled the three-story building’s infrastructure, plus replaced the HVAC system and portions of the roof.

Set on a 64-acre campus, 300 Baker Ave. also features “headquarters quality” amenities including a full-service cafeteria, conference center and fitness facility with basketball and volleyball courts and locker/shower rooms. The building roster has a 59 percent credit tenancy, denizens Newmark describes as “innovative, healthcare and tech-centric” companies.

Pullen declined to discuss pricing allocations for any of the three listings, all of which are being pitched minus any guidance on that metric. That will mean bidders will be relied upon to set the pace, with observers casting 300 Baker Ave. as a likely candidate for core-plus investors who are lured by the steady cash flow and upside in the leasing of approximately 40,000 sf still available in the hulking building that dates to 1957. Reflecting just how far the property has come, a group led by developers Ian Gillespie & Co. and Hall Properties backed by Lehman Brothers paid $6.25 million for 300 Baker Ave. in Dec. 1996 before converting it to first-class office space and fetching $47.7 million three years later.

Owned by Taurus Investments, 313 Washington St. in Newton Corner has a lot of the same elements as 300 Baker Ave., minus perhaps its size and in being a direct abutter of Boston. The 81,000-sf Newton offering is perched in a transit-oriented location served by multiple bus lines, a commuter rail stop to the Back Bay and South Station and immediate access to the Massachusetts Turnpike connecting to the Hub and points west. It also carries a 90 percent occupancy rate involving two dozen tenants whose average size is 2,800 sf and are numerous enough to ensure “minimal fluctuations in cash flow,” according to Newmark which further points to the rising popularity of Boston’s so-called inner suburbs in a district which was pioneering in that regard, Newton Corner long-established as an office address evidenced in several similar properties adjacent to 313 Washington St.

The recent demand has bolstered suburban office rents, yet Newmark estimates the submarket still enjoys a 45 percent discount to downtown Boston and 54 percent to the Back Bay, the latter district among New England’s priciest venues yet located just two exits off I-90 from Newton Corner. On the amenity front, in addition to its office tenants, 313 Washington St. houses several retail concerns, among them the popular Buff’s Pub, a dental office and Bank of America ATM. There is a hidden benefit as well—140 parking spaces in a three-level below-grade garage.

Should industry estimates bear out, 313 Washington St. would trade in the neighborhood of $175 per sf. Taurus paid $11.1 million in Dec. 2010, or $137 per sf. Besides Griffin, Maher and Pullen, other Newmark team members assisting bidders on 313 Washington St. include Executive Managing Director Mark Roth and Senior Managing Directors Dan Krysiak and Judith B. Ravech.

The industrial portfolio is scattered between Franklin, Mansfield and Northborough, with a pair of buildings in two “superparks,” those being 145 Plymouth St. in Mansfield’s Cabot Business Park and 17 Forge Park in Franklin’s Forge Park. The third asset is also in a popular industrial cluster, 360 Cedar Hill St. in Northborough. In pitching those buildings, Newmark is lauding their being fully leased with “blue chip anchors” who include Fresenius Medical Care, Kellogg Sales Co. and Rexel.

Rexel is anchor at 145 Plymouth St., a single-story warehouse built in 2000 that has 186,000 sf while Kellogg occupies 17 Forge Park in the 360-acre master-planned Forge Park complex located along Route 140. Seventeen Forge Park contains 84,375 sf. The Northborough building at 360 Cedar Hill St. has 119,125 sf set on 8.2 acres and last changed hands for $9,750,000 in June 2013. Tenant Fresenius is a health care company focused on treating patients with renal maladies.

Tribble and Hallowell are on the team for Newmark’s Bay State High Bay portfolio along with Interstate 495 leasing expert J.R. McDonald. Collective attributes include “modern infrastructure and top-tier logistical capabilites,” clear heights ranging from 26 to 30 feet, “ample column spacing” and 1.4 loading docks per 10,000 sf. On the location front, all three are within one mile of I-495, providing access to the region’s primary highways and major population centers.

Macro forces are also at work, including a dearth of high-bay distribution space that can serve the new millennium needs of industrial tenants at a time when the Internet consumer is driving firms to provide quicker delivery of goods and services, a trend that has boosted new life into the region’s long-suffering industrial world where rents have remained virtually unchanged over the past 20 years.

Colony Realty Partners bought 17 Forge Park for $6.68 million in June 2008, 147 Plymouth St. for $15.1 million two months after that and 360 Cedar Hill St. for $9.75 million in June 2013. That would equate to $80.70 per sf versus being a hair under $90 per sf if the $35-million figure is achieved